The Vermont Attorney General’s Office has settled consumer protection claims against Stonebridge Benefit Services, Inc, a seller of discount membership programs, and against JC Penney Company, Inc, which provided Stonebridge with consumer credit card information. Under the settlement, Stonebridge will pay a total of over $400,000 to Vermont consumers and the State. According to Attorney General William Sorrell, the settlement is the first to apply Vermont’s 2012 Discount Membership Program Act. “The Act,” he said, “provides our citizens with some of the strongest protections in the nation against a type of marketing that poses a risk to consumers of not knowing they are being billed, or for how long.”
Stonebridge, based in Plano, Texas, sells discount membership programs through which consumers are eligible for discounts on the purchase of automobile, travel, home, and other goods and services, and are charged each month on their credit card account until they cancel. The company markets its programs by direct mail, telemarketing, and online, under such names as Back Porch, Everyday Bargains, Fun Family, LeisurePlus, MotorPlus, Perfect Home, Savings Solutions, and Savings2Go. Consumers with J.C. Penney credit cards were enrolled in such programs without providing their full credit card number to Stonebridge, because, unbeknownst to the consumers, J.C. Penney made their full account information available to Stonebridge for billing purposes.
In May 2012, the Vermont Legislature enacted the Discount Membership Program Act, to ensure that consumers understand the terms of discount programs by requiring that enrollments occur only when consumers disclose their full credit card information to the seller, that consumers are periodically reminded that they are being charged, and that consumers are not charged for more than 18 months in a row without signing up again.
The Attorney General’s Office alleged that Stonebridge did not comply with these requirements, and that J.C. Penney violated the Act by providing Stonebridge with full credit card numbers for consumers who had only volunteered the last four numbers of their account.
Under the settlement, Stonebridge and J.C. Penney will strictly comply with Vermont law. In addition, Stonebridge will:
- Pay over $227,000 in refunds to Vermont consumers for all credit card charges imposed after May 7, 2012. Reimburse pre-May 8, 2012, charges to consumers from whom Stonebridge receives a written complaint by December 31, 2014, that they did not authorize the charges, unless Stonebridge has an audio recording that proves authorization. (These complaints can be filed with the Vermont Attorney General’s Office, 109 State Street, Montpelier, VT 05609, attn: Elliot Burg.) Pay the State $175,000.
Vermont Attorney General: Nov 25, 2014